Measuring the ROI of Your Community Management Tools

Whether you just purchased a new community or if you've had a system for years, the question of if the system is paying off always remains important. Are you seeing a real return on your investment, or is the value you're getting falling short of what you're paying for the system?

Figuring out the ROI (Return on Investment) of your community tool isn't always straightforward, but it's crucial for justifying those costs and making smart decisions down the line. Here’s a no-nonsense guide to help you see if your investment is truly worth it.

1. Nail Down Your Goals (Again!)

Remember way back when you were setting up your community? You had reasons for doing it, right? Those goals are your starting point for measuring ROI.

2. Identify Key Metrics to Track

Once you know your goals, it's time to get specific about what you'll measure. Don't try to track everything under the sun; focus on the metrics that directly tie back to your objectives.

• Engagement Metrics: Look at things like daily/monthly active users, number of posts, comments, likes, group participation rates, and time spent on the platform. Are these numbers trending upwards since you implemented your tool? Here are some metrics which show the relationship between engagement and renewals.
  • Engaged members stay 4 more years compared with non-engaged members.
  • Engaged members spend 22% more than non-engaged members.
  • Member engagement not only increases member loyalty, but also creates referrals.
  • Over half of organizations with a member engagement plan reported it helped them increase membership renewals (51%), attendance at events/webinars (50%), annual conference attendance (44%), social media engagement (34%), web traffic (31%), and non-dues revenue (25%).
• Retention Rates: Is your member churn decreasing? A strong community can be a significant factor in keeping members around. Track your retention rates before and after adopting your community platform.
• Event Participation: Are more members attending your events (online or offline) since you started using the platform to promote them and/or manage registrations?
• Support Cost Reduction: Is your community helping members answer each other's questions, reducing the load on your support team? Track support ticket volumes and response times.
• Feedback & Insights: Are you getting more valuable feedback and ideas from your members through the platform's forums or feedback channels? How are you using this feedback to improve your offerings?
• Lead Generation/Sales (if applicable): For some organizations, a strong community can lead to new leads or even direct sales. Track any conversions that can be attributed to community engagement.

3. Establish Benchmarks

Before you implemented your community management tools, where were you with these key metrics? You need a baseline to compare your progress against. If you didn't track these things before, start now! It might take some time to establish meaningful benchmarks, but you have to start somewhere.

4. Use Your Platform's Analytics (They're Your Friend!)

Most modern community management platforms come with built-in analytics dashboards. Get familiar with these tools! They can provide valuable insights into user activity, content performance, and overall engagement. Don't just glance at them; dig into the data and look for trends.

5. Don't Forget the "Soft" ROI

While numbers are important, don't overlook the less tangible benefits. These "soft" ROI factors can be just as valuable in the long run.

• Increased Brand Loyalty: A thriving community can foster a stronger sense of belonging and loyalty among your members.
• Improved Member Satisfaction: When members feel connected and supported, their overall satisfaction increases.
• Valuable Insights & Feedback: Your community can be a goldmine of information about your members' needs and preferences.
• Stronger Advocacy: Engaged community members are often your best advocates, spreading the word about your organization.

While these are harder to quantify than dollars and cents, they contribute significantly to the overall value of your community.

6. Regularly Review and Adjust

Measuring ROI isn't a one-time task. Set a schedule to regularly review your key metrics and assess the performance of your community management tools. Are you seeing the progress you expected? If not, it's time to re-evaluate your strategy and how you're using the platform.

By consistently tracking your progress and focusing on the metrics that matter most to your organization's goals, you can effectively measure the ROI of your community management tools and ensure they're a valuable asset for your members and your organization.